CRM: Inexhaustible Cup

I. What do Chechen
terrorists, chickens, and CRM have in common?
​by Andersen Consulting.

Sanal Ushanov, who is a Chechen terrorist the head of the Moscow representation of Accenture, tells us (the fragment of his speech is from here​):

One can say, that CRM is a conceptually new, customer-oriented approach to business. An approach, which focuses on differentiating a company from its competitors and allowing each customer to have their own unique experience in communicating with the company during rendering of services and carrying out transactions. Today this is a new business model relevant to most western companies that aim at such strategic goals as reducing customer outflow, acquisition of new customers, increasing profits from current customers.

There’s an old Internet meme ‘Why did the chicken cross the road?’
It has many versions and variations, which our readers may google themselves. We are, however, interested in the answer to that joke given by an Andersen Consulting representative (we should remind you that Accenture, on behalf of which Sanal Ushanov, a Chechen terrorist, spoke, is nothing but the remains of Arthur Andersen after a scandal, bankruptcy, and rebranding that followed involvement of one respected auditing company in the infamous Enron scandal):

‘OK, so why did the chicken cross the road?’

A version by the consultant from Andersen Consulting:

Lack of regulation on the hens’ side of the road was a threat to their current market position. The hens faced the need for changes and reforms to create and develop conditions that the today’s circumstances required. Andersen Consulting, working alongside with the customer, helped the hens to reconsider their physical distribution strategy and current processes. Using a Poultry Integration Model (PIM), Andersen helped hens to use their skills, practices, assets, and experience to support their general strategy within the Program Management Structure. Andersen Consulting put together various methods of road crossing, and the best hens' representatives together with Andersen consultants, who had vast experience in transportation industry, defined a two-day route to increase hens' amount of knowledge (both expressed and implied) and provide them with a opportunity to interact with each other, in order to successfully develop and implement a wide entrepreneurial structure via a continuum of hen road-crossing processes. The route was strategically sound, industrially focused, and was created as a consistent, clear, and complete market message in accordance with the hens’ mission and their view of the situation. It promoted moving towards creating a full-scale business integrated solution. Andersen Consulting helped hens to change in order to become more successful.

Despite a certain degree of exaggeration, inevitable for a joke, the CRM (Customer Relationship Management) and the PIM (Poultry Integration Model) have something in common, don’t they?

And here’s an excerpt from a morale-boosting text, found on a website of a Russian company, specializing in ‘CRM systems’. According to that company, it provides services for several thousands customers:

The customer-oriented approach affects not only the general business strategy of a company, but also its corporate culture, structure, business processes, operations. At the same time it’s important to realize that adopting the strategy is not the only key step to building a customer-oriented company. Another one is a complete automation of customer relations management with help of CRM systems. Such systems allow automation of a CRM strategy. CRM software is a specialized system designed to automate business processes, procedures and operations that are part of a company strategy.

Is everything clear?

Now we’re suggesting you reading this comprehensive strategy within Program Management Structure once again, but – slower and out loud – and expressively.
As if enjoying this sequence of roundish, scientese and hollow brain-rape sounds, threaded like beads onto one another.

II. ‘So what should it do?’ and
​other questions below the belt.
All truth about the ‘purchase funnel’.

Here’s a trick question: what should a ‘CRM system’ actually do?

We all understand what accounting software does. What stock or personnel control software does.
We know what a word processor is.
At least, in general.

And what is a ‘CRM system’?
It’s not an option to just say some arrogant bullshit (‘…allows automation of a CRM strategy’) – it won’t
work.

So, what does it do?

As a result of a potential customers survey we will, at best, have such answers as:

• well, it kinda allows keeping track of customer requests (big deal!​)
• something like a call center, which is ‘integrated’ with a ‘CRM system’ (well, a call center is a call center, it’s integrated, of course)
• a single database for storing customer data (phone numbers, apparently).
  The irony would be probably redundant here – in this case, the completely free Google groupware would be of use, while having by far better usability, reliability and cross platform ability.
• the most sensitive folks who are still under impression of PR texts from CRM sellers websites, might babble about some unfathomable ‘processes’.
  Besides the fact that creators of ‘the best CRM system’ don’t understand the essence of the term ‘business process’, the accent on ‘deep implementation’ suggests certain ideas about expressed sublimation trends in authors’ thinking. We suggest that our readers decide for themselves, what and where exactly they are going to be implemented with by those folks.
  Deeply.
  
  

  Joking aside, after a CRM system sales person uses such term as ‘processes’, watch out for the next stage of persuasion by way of showing pictures (beware!) with hypnotic effect (to unprepared audience), which contain geometric objects of various colors, connected at will with lines of various thickness and structure.

• and — dam-dam-dam-dadadam-dadadam (Darth Vader theme) — «the purchase funnel»!
  

  Oh my, the ‘purchase funnel’! If only any of hapless victims of ‘automation’ CRM-style, lured by priests this unsophisticated picture, could understand what it is and what it does.
  Oh, but money in the bottom of the picture is pictured so beautifully! The little colored bricks are painted and stacked upon one another with so much logic! And sometimes there are captions in English in a beautiful font! So hard to resist.

  Meanwhile, the stupefied mind rises high into the skies, picturing people’s benevolence – as if those people, magnetized by the irresistible appeal of the ‘purchase funnel’, stick to the edge of the sweet trap like bees to a flower, then glide down and break under the ‘funnel’ mouth into clinking gold pieces.
  O sancta simplicitas! The brain has no idea, that its owner was caught on this unsophisticated lure of a ‘funnel’ and it is he who now is the bee in this little scene.
  

  It’s not even important now that any school student understands that any sales process is broken down into stages, that not everyone who takes interest becomes a customer in any type of business (including ours – the verbal ‘purchase funnel’).
  But the reason school students are school students is because they don’t have the wits to call it a ‘purchase funnel’, so they just go selling Herbalife ‘CRMs’.
  On the other hand, we don’t need such comparatively honest ways of relieving other people of money techniques, because ‘we make money together with you.’

  So what’s the ‘purchase funnel’ for? Except for the primitive function of visualizing stages of the sales business process (then again, if you don’t know, how you in fact make sales, there’s nothing that can be done a ‘purchase funnel’ won’t help), it serves the same purpose, as the three ‘CRM’ letters.

  What does it mean? Right: don’t look for a black cat in a dark room​. Especially, if you know it’s not there.

• Sometimes, in addition to ‘CRM’ systems (buy one – get two, we know fabric best!) they offer things that have no connection even with the most vague Wikipedia definition of a ‘CRM’. E.g., a ‘full-scale stock control’, a ‘CRM for retail business’ (sic! — apparently, for a kiosk with beer and cigarettes, otherwise how would they sell to rednecks without a ‘purchase funnel’?), and maybe even ‘project management’, if you have some change left.

Such free applications are generally nothing but plain marketing lies – as if instead of a torn out hood badge on an old 600 series Mercedes they would stick a ‘good-lokin’ label of a ‘brand new platform for building a luxury car’. Including a once in a lifetime opportunity to deploy a full-scale MP3 player on that platform!

III. A hands-on tryout
of a ‘CRM system’: Arbeit,
​theoretically, macht Frei.

So, in the end, what in fact should a ‘CRM system’ do?

Since neither information straight from the horse’s mouth, nor abstract speculation won’t make it clear, to make further reading easier let’s define by intuition, what a ‘CRM system’ is:

• it stores information about customers,
• their requests,
• and potential deal stages

Supposedly, it’s also integrated with a call center (although it’s highly questionable, what in reality is ‘integrated’ with what and how, but let’s keep it simple).
How do we use these features in real life?

Let’s think of a few ideas.

Let’s suppose, your company sells something (something tangible, e.g. building supplies). If you’re interested in a ‘CRM system’, then, apparently, building materials are sold through a corporate/wholesale channel – retail customers have been buying in stores and marketplaces for hundreds of years, having no expressed demand in ‘CRMs’ and other ‘purchase funnels’. 

OK, so you purchase, install and launch a ‘CRM system’.

Now what? Now you know, who called you and when (that’s not bad, joking aside). All customer data is stored in one place (it can be argued, that this was the case before – at least in the accounting department).

Wonderful, all looks good.

And what magic changes happened in the everyday life of your company? Suppose, a customer is calling your salesman, what can he answer?

‘Good evening, Ivan. Can you imagine, I know that you’re calling, because it’s your phone number! You called 14 times this week!’

Do you think Ivan is calling to get that kind of information?
It’s very unlikely.
We bet he’s interested in ‘what do you have and for how much’ and ‘if you don’t, when will you have it’ kind of information. But then — oops! I’ve failed it again! A ‘CRM system’ doesn’t have that information and can’t have it. You would need a full-scale ERP system for that, or at least some stock control software (in addition to an incredibly useful ‘CRM system’).

In short, if you’re selling tangibles, then a ‘CRM system’ on its own won’t be of any use.
Except, of course, you being in the red because of its purchasing and ‘installation’, and frustrated because of all the useless fuss.
And if it doesn’t do anything itself, what’s the use of it? Especially, since all ‘CRM’ functionalities can be implemented in a single system, which automates all business processes of your company?
Which, among other things, has information on stock, prices and future receipts – so that you’d have something to tell Ivan, when he calls.
Even better, you can post it all on your website, so that Ivan doesn’t bother your operators and hold the connection. Instead, he would happily and easily place online orders for his cements and putties on your b2b/b2c portal​, bypassing your salespeople – the useless eaters.

Some people might tell us: ‘Right, that would work with building supplies or TVs and stuff. But have you considered that we might be selling unique super-expensive products with a sales cycle of up to two years, including manufacturing of the product to order and its delivery to Russia?‘
‘Every customer and every deal for us is as good as gold. We simple have to use tracking, control and other purchase-funnel kind of stuff!’
Yes, we answer, there are such types of businesses, too.

To be specific, let’s take, e.g. sales of some siemens turbines for some one million dollars (or one hundred million, we don’t mind!). Some ’ladies and gentlemen’ are sure that in in such business, a CRM system is at least useful, if not essential.
‘No way, ladies and gentlemen!’ We’ll deny the self-deception of the bourgeois with the decisiveness and directness of speech of the proletariat.

Here’s our thesis of paramount importance: given the conditions of the siemens turbine business, it is impossible to have a situation, when a potential deal might go wrong only because the account manager in charge forgot to make a call or send an e-mail.
I.e., a deal could go wrong because of thousands of reasons, but: the lack of a ‘CRM system’ is not one of them. And if the account manager had that ‘CRM’ system, nothing would change.
Why? The size of the manager’s commission on such a deal is easy to imagine (and a rare number of such deals), as well as his burning desire to close the deal (the authors, who used to be a target of such account managers, can testify – you just can’t get rid of them). He himself would make 500 reminders and have sleepless nights, waiting for a call or a meeting with sweaty palms. Such manager has only a few potential customers. A smartphone reminder or Google Calendar for group work in the worst-case scenario is well
enough.

You disagree? You, so to say, have learned it from experience? Well, then either you had a crappy incentive program together with the sales system​ in general, or for some reason you had hired complete spherical idiots in a vacuum. If your company manufactures something like Siemens turbines, then the root of the problem is that its products and/or delivery terms are non-competitive. In any of these cases, a ‘CRM system’ won’t help you. And, we bet, if you purchased one, it has not helped in fact.

But all of the above was said about trading.

Let’s have a look at services.
There should be its own specific… uhm… what do they call it… circumstances!

However, if you look closely, the situation with services is exactly the same.

• if we’re talking about a large scale​ service business, then the CRM functionality alone would not be enough, just like in the case of trading building supplies – for the same obvious reasons.
• if the services are rendered according to long-term expensive contracts (e.g., selling Ultimate IEM solutions), then functionality of a ‘CRM system’ is way abundant, similarly to siemens turbines. Despite the fact that we can use the CRM functionality that we develop ourselves​ for free – it’s way abundant for us as well, even for free. Every sales person knows their potential customers and what they have to do. And if they don’t – the problem is not in the lack of a ‘CRM system’.
• if services are short-term, local, and on a small business scale, like beauty salons, then they need the functionality of a simple register, where they keep appointments. And it works really well, we must tell you. Training and installation are fast and cheap, reliability is superb, while TCO is unparalleled in comparison to any other system. 

In the end, if we summarize points on all possible alternatives – a stand-alone ‘CRM-system’ ‘as is’ somehow doesn’t fit into day-to-day operations of a well-organized and administered company.

No matter what it does.

Can we come up with a realistic situation, where a ‘CRM system’ would be necessary and sufficient?
Yes, with some assumptions.
E.g., a taxi company.
Orders are accepted and distributed with the help of a ‘CRM system’. Essentially, all necessary functionality of the front office is covered. You can even keep track of cash that drivers have to give in to the cashier in the end of the shift.

However: all back office personnel in this case would be working with makeshift tools. If a business is small (a few cars, or even two or three tens of cars), then this scheme is quite viable.

What if a taxi company has several hundred cars or more?
They need to buy cars (lease by a few at a time – with payment conditions varying from car to car). They need to service cars – it means keeping records of mileage; it means having their own repair shop and stock of spare parts and consumables (record keeping) would be good, etc. This is not going to fit into any kind of a ‘CRM system’, and you can’t keep track of it all with makeshift stuff – people will steal.
No matter how you slice it, if your business is growing, a full-scale automation system with advanced ‘CRM’ functionality​ is an obvious choice.
That’s about it.

In the end, let’s consider a rather realistic situation, when victims of a badly chosen ERP system (sometimes we need to use quotes around ‘ERP’ as well, but more about it later) try to compensate for its drawbacks with installation of a ‘CRM system’ on top of it.
Like, our accounting software sucks, but we’re gonna add a cool ‘CRM system’, integrate it all, and live happily ever after and die together on the same day.

Now please welcome an Oracle representative Mr. Roman Samokhvalov:

An attempt to bring together a patchwork solution made up of components from several vendors by matching customers from various databases, business processes, reports, etc., practically always fails. According to META Group estimates, if a company choses do to so, the integration costs on average amount to 60% of the project costs. And even if they achieve results to some extent, upgrading any of the components inevitably demands reconfiguring of interfaces with all the others. When you have many such components, it becomes a continuous nightmare.

Nicely said! ©
We devoted a separate essay​ to such strategy of automation, when you try to mate a snake with a hedgehog (known among professionals as ‘patchwork automation’), to which we refer our inquiring readers.

IV. Denunciation point by point,
​and the Apostle Matthew’s opinion

Let’s try and summarize the above-said:

1. The ‘CRM’ is nothing more than three letters that vaguely describe a very general domain: something about interacting with customers.
2. These three letters are implemented in common commercial activity only to make up certain entities beyond necessity (according to William of Ockham​) that have nothing to do with the real world things.
3. This ‘necessity beyond’ in itself is of no interest to anyone. The clink-clank of these letters and their mating with antiscientific pseudo-intellectual diarrhea is just a simple marketing move to fish for indecent amounts of money out of trusting folks’ pockets for rather primitive craft​.
4. This primitive craft is what they call the ‘CRM systems’.

In fact: if even what CRM means is unclear, then the (derivative) notion ‘CRM system’ is all the more vague. There are no standards that define whether certain software belongs to the ‘CRM systems’.
If you follow the Wikipedia definition, then an automatic door with a photo sensor that leads to an office is a case example of a ‘CRM system’. A pocketbook – is a ‘CRM system’ as well.

In these dark waters hides, on one hand, the secret why most of the ‘CRM systems’ on the market are so ugly (in fact, their useful functionality is comparable to that of a pocketbook), and the reason why they’re so popular among sellers, on the other.
It’s like with nutritional supplements – just include the note that it’s not a medical product and go ahead (contents and effect are not important). Here’s Kuraid made of space irradiation activated water with shark ginseng, squeeze in, if you can. Astral projection? Guaranteed, if you buy two packs or more. Please move, people are waiting! Does it smooth wrinkles? By being placed on top of your photo! Here’s the certificate of origin of the papyrus with the Kremlin diet pill secret inside.
Same with ‘CRM systems’: if the software has little forms with name, address, and phone number fields – the new ‘CRM system’ is ready to be launched into minds and pockets of trusting patsies to conquer markets: ‘come on baby, light my fire’. ‘Business strategy integration’ based on ‘deep business process implementation’ in chicken-road-crossing process continuum is guaranteed, 100% true.

It’s a hardly usable solution of fictional problems (like avian flu or Ebola fever, top of the agenda at the time this text is being published).
Or, more generally from political and economic point of view – war on poverty, unemployment, and global warming.
A ‘CRM system’, however, causes far less damage.
At least, for now.

P.S. The most meticulous readers (our favorite!) wouldn’t miss a chance to counter with a joke: what about you, guys? You’re going after the CRM here in full blast, but you yourself sell the ERP!
Same three letters with same vague content.

Well, it’s not quite true, my fair readers!

First, there are rather formalized requirements to what a system has to be able to do in order to be called an ‘ERP’ (Ultimate IEM solutions conform to the ERP II standard).
If you’re seeking exact definitions, please go google them. Simply put, a contemporary ERP system comprehensively covers all business processes of a company, as well as supplies means for interacting with suppliers/customers (that’s right, the very same CRM!), including supply chain management, b2b and b2c electronic trade, etc.

Second, the ERP system name has devaluated a lot in our country as a result of the domestic audience being undemanding – there are many products made by our native companies​ that are positioned as ERP, while in fact they’re rather primitive pieces of stock control software that can also make out accounting documents.

How do we separate sheep from goats? Here’s a couple of time-proven techniques:

• Caveat emptor
• You will recognize them by their fruits​. Are grapes gathered from thornbushes, or figs from thistles? (Matthew 7:16)

UPD October 27, 2014:
Boiling are minds of outraged CRM creators, sellers and implementators. Mail servers of Ultima company have been heavily bombarded with garrulous messages, cursing the author: ‘what kind of idiot wrote that nonsense’, etc.
Infringement on the sacred, blasphemy!

Dearest colleagues, brothers in misfortune IT industry coworkers!
If you have objections that are reasonable and to the point – then welcome. We’ll make corrections and publish proper thank-you notes.
However, if you have nothing to say, but swear words – then why waste your effort? It’s a doubtful endeavor – to compete with nameless authors of writings on the walls both in concision and expression.